Social-networking site Facebook is headquartered in Palo Alto.
Last August, Facebook bought up all of Friendster's old social networking patents and patent applications, but at the time there was little fanfare about it. From the GigaOm post:
The Friendster patents, which date back to the early days of social networking, are incredibly broad. They cover things like making connections on a social network, friend-of-a-friend connections through a social graph, and social media sharing. Friendster had received its first patent back in 2006, when it was already on the decline.
Basically, all the things people do to communicate to one another online, including "friending" others, could all be owned by Facebook. While this may not mean much to average users, it means a lot more to any company who would like to compete with Facebook. The latest application is based on "a degree of separation between the first user and each second user within a social-networking system," or similar to friending, according to BNET.
How could any new company hope to compete with Facebook if online social interactions are patented? Any new company couldn't, which means Facebook would corner the whole social network market until it expires.
That's not great news for the average person unless s/he believes that Facebook has it right and its social network could never be improved upon. But if one believes there's some innovator or creator out there who might have something better, Facebook lawyer goons could crush that start-up easily.